I don't have this exact problem, but after upgrading my iPhone to 3.0, now sometimes the menus on the car's screen are not populated with text correctly. For example if I go to search by playlist, I'll get one or two playlist names and then empty spaces where the rest of the names should be. Usually hitting BACK and going back in fixes it. Weird.

There was another thread with a posting of software updated for the PDIM. I looked at the description and it mentioned iPod touch compatability update. Here's the link http://tis2web.xw.gm.com/tis2web You'll need your vin.